Amazon, Dropbox, Google and you win in Cloud-misic copyright decision

The disk drives powering Dropbox, Amazon's Cloud Drive, and Google Music likely issued a small sigh of relief on Monday,
after a US federal court judge found that the MP3tunes cloud music
service didn't violate copyright laws when it used only a single
copy of a MP3 on its servers, rather than storing 50 copies for 50
users.

For Amazon and Google's nascent cloud music services, the
decision clears the way for them to make it easier and faster for
customers to use their music services; gives them legal cover to
reduce the amount of disk space needed per user; makes it less
likely that new customers of their music services will bust through
their ISPs data caps when signing up; and clears the way for the
companies to let users add songs found on webpages and through
search to their lockers with a single-click -- all without either
being sued by record labels for doing so.

Monday's decision centres on MP3tunes, a cloud-based online
music locker service, that allows a customer to upload the music
from their hard drives to a "locker" on the web, where they can
play back the songs from any connected device.

But instead of uploading all of a user's songs, MP3tunes'
software would check the library for previously uploaded songs and
if a match existed, the song would just be added to the locker
without requiring an upload. No matter how many customers
"uploaded" that song, MP3tunes kept only a single copy.

EMI, whose artists
include Usher, Jay-Z and Lady Antebellum, sued MP3tunes over that
practice and others. In a complicated federal court decision on
Monday, a New York federal court judge ruled that the practice was
legal -- but only insofar as the single storage method is done for
exactly unique copies. So for instance, all people who bought
"Stairway to Heaven" as an MP3 from Amazon would have the exact
same file (as determined by an MD5 Hash) and MP3tunes could just
store a single copy.

However, the ruling makes clear that if MP3tunes scanned a
customer's music collection and found "Stairway to Heaven" ripped
from a CD with a slightly different file size, the company could
not simply substitute a master copy. Instead, that customer would
have to upload the file. While the latter case still seems
non-sensical, the ruling still must come as a relief to Google,
Amazon and Dropbox.

Though Dropbox, an online storage provider, has never been sued
by record labels, it uses the exact disk-space saving method that
MP3tunes did. If a Dropbox customer saves a file of any kind (text,
movie or music) to their online hard drive, Dropbox checks the
file's hash. If there is a match, then the file is instantly
"added" to the user's online hard drives without the need to upload
it. (This practice is not without controversy, due to the security
risks it creates and because it makes it possible for users to be
targeted in file-sharing suits.)

Given that the company's growing success and intention to become
the hard drive of the future, it's highly likely the company would
have been sued for the de-duping practice at some point.

On the other hand, both Amazon and Google launched online music
services recently -- without striking deals with the labels. Both
require every user to upload every song, regardless of whether
other users had uploaded the exact same file. That leads to
enormous bandwidth usage on the part of customers and disk space
being wasted by Google and Amazon.

The other annoyance is that can take weeks of uploading files to
move your entire collection, depending on your connection
speed.

That design decision seemed to be in keeping with a decision in
the Cablevision case, where the Second Circuit Appeals Court ruled
that the cable company's DVR in the cloud was legal only because
every user who told the service to record a given show got their
own copy of the show made.

By contrast, Apple's new cloud-music service -- created with the
blessing of the big labels, only uploads the songs it doesn't know
-- and uses master files. In fact, if a customer has a low-quality
copy of a song from one of those labels, Apple will automatically
upgrade the song to a better one. But Judge William H. Pauley III
in this case said that MP3tunes' system complies with that ruling.
"Importantly, the system preserves the exact digital copy of each
song uploaded to MP3tunes.com," Pauley ruled. "Thus, there is no
"master copy" of any of EMI's songs stored on MP3tunes' computer
servers."

So what's that mean for Google and Amazon?

Well, now for the first time, a federal court has cleared the
way for them to fingerprint songs, even in a weakened way, Google
and Amazon could quickly identify which of the songs on a user's
hard drive it already has an exact copy of. Those could be added
immediately, creating a better initial user experience.

The decision also said that allowing "sideloading" of songs was
legal. That was the feature of MP3tunes that let users add songs
they'd found on webpages, such as music blogs, directly to their
online locker. That song/artist/link combo was then added to
MP3tunes's search function so any other user could then add a song
by searching for it in a custom search box. That, the court ruled,
was legal so long as a company removed the links and all songs
added to lockers via that link when a copyright holder tells the
site that the link is infringing on their copyright.

If that precedent holds, Google could pair up its search engine
with its cloud-music service -- making a powerful combination,
though not one that would endear the search giant to the record
labels, which so far have not granted permission to Google to sell
their songs.

But given Google's friend of the court briefs in the case and
the fact the founder of MP3tunes, Michael Robertson, works at
Google now after one of his other companies was acquired by it,
don't rule that feature out too soon.